Projected Future Cost of Obamacare Subsidies Nearly Doubled During the Biden Administration

There is a newer version of this post here.

Based on the Congressional Budget Office’s (CBO) most recent projections, federal spending on Obamacare subsidies from 2026 to 2033 is now expected to be $490 billion—or 90.9%—higher than what CBO projected when President Biden took office. Importantly, this period excludes Biden’s COVID credits—enhanced Obamacare subsidies that also exploded fraud and waste in the program—since those expire after 2025.

The main driver of this massive spending increase is a set of Biden administration policies that prioritized enrollment at any cost. These policies weakened program integrity measures, stopped income verification for many enrollees, and essentially opened a year-round enrollment period. Some, like the decision to fix the so-called family glitch, were implemented without clear legal authority. The biggest winners from these policies were health insurers, who reaped massive profits from the flood of subsidies.

The One Big Beautiful Bill (OBBB) contains a host of commonsense measures to ensure that only eligible individuals who actually want coverage are enrolled, while reducing incentives for income manipulation to maximize subsidies. The OBBB also includes an appropriation for the ACA’s cost-sharing reduction (CSR) program, which will lower premiums and federal deficits.

In total, the commonsense reforms in the OBBB will reduce projected Obamacare subsidies by $338 billion over the 2026–2033 period relative to the inflated Biden-era baseline. However, even with these reforms, Obamacare subsidy spending would still be $152 billion higher than CBO’s February 2021 baseline for ACA subsidies over the same period. In essence, the OBBB claws back a large share of the wasteful spending from the Biden administration’s policies.